Research On The Effect Of Narrowing Saving And Loan Interest Rate Spreads On China's Commercial Banks' Operation Risks Under The Background Of Interest Rate Liberalization

Since the 1970s,financial deepening has become an important measure for countries to promote economic development.Interest rate liberalization is the core of financial deepening.Therefore,interest rate liberalization has also become an important trend for countries to promote the development of financial market.With the deepening of China's financial liberalization process,interest rate liberalization has become an important part of China's financial reform.For China's commercial banks,interest rate liberalization reform is a double-edged sword,bringing both opportunities and challenges and risks.On the one hand,interest rate reform improves the financial environment,and gives the commercial bank more independent pricing power which makes the commercial banks to get rid of the dependence on traditional deposit and lending business,develop intermediate business and off-balance-sheet business,change business model gradually,seize the opportunity to realize breakthrough development.On the other hand,market-oriented interest rate reform increases the cost of capital in financial markets,and increases volatility.In order to achieve targeted earnings,commercial banks need to accept the relatively high risk project with high-yield to afford high loan interest rate,which leads to the increase of risk of commercial banks.What's more,the business model of relying on traditional deposit and lending has been severely impacted,in the process of reform of interest rates,commercial banks face with challenges and risks.Therefore,during the process of interest rate liberalization,commercial banks should actively manage the challenges and risks,improve risk management ability,design innovative banking products,and expand intermediate business to realize the successful transformation and upgrading of commercial banks.According to the related theory and the existing research results of narrowing saving and loan interest rate spreads under the background of liberalization of interest rate and the risk of commercial banks,this paper analyzes the process of China's interest rate liberalization,saving and loan interest rate spreads and commercial bank management risk to theoretically analyze the impact of narrowing saving and loan interest rate spreads on commercial bank risk management under the background of interest rate liberalization,and achieve empirical study on the influence of narrowing saving and loan interest rate spreads on commercial bank risk management under the background of interest rate liberalization.And then,the paper will put forward corresponding suggestions for commercial banks to deal with the risks of interest rate liberalization.The paper consists of five chapters,which are as follows:The first chapter is the introduction,mainly elaborating the research background,research significance,related literature review,research methods,innovation points and possible deficiencies.The second chapter is the theoretical basis and the current situation of interest rate liberalization in China.Firstly,the theoretical basis of interest rate liberalization,the narrow of the saving and loan interest rate spreads and business risk of commercial Banks are discussed,which lay a theoretical foundation for later analysis of mechanism and empirical research.The second is to analyze the current situation of interest rate liberalization in China,which systematically sorts out the reform process and current situation of interest rate liberalization in China,and comprehensively measures the degree of interest rate liberalization in China by using the principal component analysis method to quantitatively measure the degree of interest rate liberalization in China,and use it as a macroeconomic control variable for empirical analysis.The third chapter is the mechanism analysis of the impact of narrowing saving and loan interest rate spreads on commercial bank risk management under the background of interest rate liberalization,based on the analysis of risk factors,this chapter mainly analyzes the influence of the interest rate liberalization on saving and loan interest rate spreads,and the interest rate channel,credit scale channel and assets channel of the influence of narrowing saving and loan interest rate spreads on commercial Banks operating risk,qualitative analysis of the influence lays theoretical foundation for the later quantitative analysis.The fourth chapter is the empirical analysis of the impact of narrowing saving and loan interest rate spreads on commercial bank risk management under the background of interest rate liberalization.Based on the qualitative analysis in the third chapter,this chapter empirically studies the impact of narrowing saving and loan interest rate spreads on commercial bank risk management under the background of interest rate liberalization and completes the robustness test.The empirical results show that there is the narrowing saving and loan interest rate spreads will significantly decrease business risk of commercial Banks.The business risk of commercial Banks is negatively correlated with the level of macro interest rate liberalization.There is a significant correlation between business risk of commercial Banks and their profitability and risk management ability.Business risk of commercial Banks is also affected by macroeconomic environment.The fifth chapter is the conclusion and countermeasures,according to the results of empirical study,the paper draw the conclusion of the study and put forward targeted suggestions for commercial Banks,so as to cope with the impact of interest rate liberalization and challenges.